In early October, US 10-year Treasury yields hit a 24-year high of 5.36%, while 30-year yields reached 5.73%. Despite these pressures and geopolitical tensions, the S&P 500 rose 2.1% to 7812 points. Market stability is largely attributed to algorithmic liquidity and 0DTE options trading, which dampen volatility.
Money market funds grew by $72 billion to $7.96 trillion, serving as a potential reserve for bond purchases. Gold remains a primary hedge, with ETFs attracting $31 billion in Q3 and reaching record holdings of 4256 tons. Conversely, crypto ETFs saw outflows of $679 million for BTC and $542 million for ETH last week.
Bitcoin ended the decade at $83 700, while Ethereum dropped 5.6% to $2535. Market dominance of Bitcoin stands at 59.4%. On-chain activity shows a decline, with Coinbase active users down 13% year-over-year and new BTC addresses falling by 43% compared to 2021 levels.
Open interest in perpetual futures rose 5% to $390-400 billion. For Bitcoin options, the maximum pain point is $78 000, with significant call interest at $95 000 and $100 000. Ethereum's maximum pain point is $2500, with 37% of block trades focused on range-bound strategies.
Upcoming inflation data, including CPI on October 14 and PPI on October 15, remains a critical factor for market direction. Additionally, the USD/JPY exchange rate at 158.2 poses a risk, as potential Japanese intervention could disrupt carry trades and impact liquid risk assets.
